Levels and Plan for 02nd Sept

The GDP growth helped fuel the rally today and expectedly BNF responded to the GDP numbers better than most including us anticipated at the Open. But again our Hypos were spot on for the Levels and Targets.

As Markets move beyond all time highs it’s these wonderful projected values off our Market Profile Charts which will keep giving us an edge as we probe higher into unchartered areas.

Nifty Sept F

Background / Previous Auctions :

Medium Term :

We have maintained from Friday May 16th that the range of 7560- 7125 (spot prices) seen on that day forms the backdrop of the moves we may see in the Nifty for a considerable amount of time as it was a 5 sigma event.

The auction remains positive as long as we close above the highs of that day (May16) ( Friday 8th Aug – low was 7540 and close of 7568) The largest drop seen on May 16 th was 432 points and the rally from 5110 has never been penetrated by a drop of more than 430 points .

Targets for the Upmove remain 7900 spot (achieved) and 8300/ 8581 in the medium term. Support at 7500/ 7100 spot.

Our Profile studies indicate 11600 as a long term target on the Nifty in 2016-17 provided 6300 holds through 2015

Short term :

Today was evidence that step 2 of the Steidlmayer distribution discussed here is Over and the Markets head back to Imbalance. In such a scenario the first imbalance target of the new move will be 8104-8124.

On the Monthly Time frame we see September Nifty having supports at 7835 and 7706 on spot levels and targets of 8068 spot and 8226 spot.

Support for the current week has moved upto 7950 Sept F from the 7835 F in the auction of last week. Resistance will be seen at 8087- 8103 F

3) Day type was a normal variation day and the market closed at Buyer’s extreme .

4) Failed auction noted at 7955 on 27/08 is on day T+2

5) Single prints noted at 8016 would indicate a new support base near 8016.

Hypothesis :

Hypo1 ) Since the day finished near Hypo 2 targets for the intra move only a move above 8075 will bring new buyers for a look at 8102 and 8134 later. Stops for this move above 8075 will be at VAH 8055. Open has to be above 8075.

Hypo2 ) An open below 8071 would mean small shorts for 8055 and 8039 where OrderFlow should be watched for Buyers coming back again.

BankNifty Sept F :

Background/ Previous Auctions :

Medium Term-

Friday May16th range of 15730- 14430 in spot provides a backdrop to the moves we may see in the BN for some time. There is a 1000 point move in BN when it trades above 15800 spot

Our bias is positive above 15100 spot, and as long as the BN stays above 15100 we will trade towards 17680 .

Short Term :

On the Monthly time frame support for Sept BankNifty is at 15580 spot followed by 15200- 15100 mentioned above. First target would be 16335 followed by 16795.

For the week support moves to 15683 sept F. If 16124 sustains then BNF would trade upto 16526 during the week

2) vwap of the day placed at 16008 up almost 200 points from yesterday.

3) Day finished in a spike at 16169 and spike rules apply at open tomorrow.

4) Pull Back low was at 16004 and would be an important point for the coming sessions

Hypothesis :

Hypo1) An Open below spike highs of 16169 would mean that the BNF chooses to auction the spike zone per Auction Market Theory and can see a 16169 – 16060 kind of range in the initial period of the day. Below 16060 there will be further weakening to 16004 and 15947 if 16004 breaks.

Hypo2 ) An Open above 16169 would mean that longs are still in play and index can move upto 16257 F with stops below 16124.